OPINION: Why selling low does not work

"Competing on price is not just about price - it's about value," says John Coulter from Target Components.
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"Competing on price is easy – just sell cheap. If you believe this you are completely mistaken."

Target Components Business Advisor John Coulter has offered advice to independent PC retailers on price cutting to compete with national chains.

It's the first of a series of blogs that will illustrate what a strategy for price competition could look like. 

"[Competing on price] won't and doesn't work," he said in Target's latest blog. "Our second Retail Price Comparison – now with over 200 independent retailers contributing - confirmed what we found in the first: those who sell low have the worst satisfaction with their sales.

"Selling low does not work. It does not give you competitive advantage. Because competing on price is not just about price - it's about value. The truth is if you are to make a success of competing on price you have to be able to compete without it.

"You have to be able to compete on a host of other differentiators with nothing whatsoever to do with price. Your knowledge, expertise, your place in local communities, honesty, reliability, and a host of other ‘soft' stuff. Competing on price isn't just about numbers on tags, it's about image and reputation."

Coulter used data representing the competitive positioning of eight indies.

He advises independent retailers to focus on setting themselves apart in other ways, rather than purely chasing prices. This will be explored in further weeks.

You can check out the full summary on Target's website.

John Coulter is Business Adviser at Target Components, providing business services for free and without obligation. Contact John on 07854 195 718 or email john.coulter@targetcomponents.co.uk.

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